It has been a busy few weeks for accountants as the new tax year is about to get underway and businesses have been wrapping up their finances before the April 6th deadline. However, do you know why financial years do not run alongside calendar years? Here we explain the history behind the UK tax year dates.
The tradition of starting the tax year at the beginning of April commenced as long ago as 1752 when the Georgian calendar was first introduced.
Until this date, the UK used the old Julian calendar, named after Julius Caesar and dating back to 42BC. This comprised 11 months at 30 or 31 days a month, and the typical shorter 28 or 29 days for February.
Under this calendar, the old New Year’s Day was March 25th. Britain decided to make the change to the Georgian calendar after realising the Julian calendar had fallen behind the solar calendar by as much as 11 days by 1752. This was especially a problem as the rest of Europe had already adopted the Georgian calendar, and so were working with different dates.
To make sure there was no loss of tax revenue, the Treasury at the time determined the taxation year should still be 365 days, which meant it would end on April 4th the following year. Subsequently, the new tax year would be April 5th.
However, it changed again in 1800, as this would have been a leap year (for tax purposes) in the Julian system, but it was not in the new Georgian calendar. Therefore, to make the 1800-01 tax year run the same length as usual, the new year had to begin on April 6th.
The Treasury no longer includes leap years for tax purposes, which means financial years have run from April 6th to April 5th ever since.
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